On behalf of the Commission, I am pleased to present to you the first 2005 bi-annual edition of the Communications and Multimedia Market and Financial Review. TMB recovered marginally from the heavy blow in the first quarter of 2005, reaching a market capitalization of RM33.9 billion in the second quarter of 2005. Winners were Maxis (4.3% increase in market capitalization to RM24.1 billion) and Pos Malaysia, which recorded higher profits and a market capitalization of RM1.8 billion at the end of June (up 38.5% from 2004).
The C&M sector's market capitalization increased by RM2.4 billion or 3% from the end of Q1 2005. TMB's market capitalization was RM33.9 billion at the end of June 2005 compared to RM33 billion in 1Q-05. Pos Malaysia remained attractive throughout the first half of 2005 with further gains and a market capitalization of RM1.8 billion. at the end of June (an increase of 38.5% from the end of 2004).
ASTRO recovered its losses in the first quarter of 2005 and achieved a market capitalization of RM10.5 billion at the end of June 2005.
MALAYSIAN VERSUS OVERSEAS COMPANIES
ECONOMIC TRENDS – LOCAL & OVERSEAS
This may indicate that economic conditions may pick up in the second half of the year, although expected production and expected export orders are said to have slowed. However, MIER Consumer Sentiment Index (CSI) fell by 11.1 points to 109.8 in the second quarter (120.9 points: 1Q-05) reflecting concerns about the rising trend of fuel prices and their impact. The Consumer Price Index (CPI) rose to 3.2% in June 2005 (May: 3.1%) due to increased prices of food (fruit and vegetables), drinks and tobacco, transport and communication.
Meanwhile, the monetary policy stance remains accommodative to support sustainable growth, although Bank Negara Malaysia is closely monitoring current internal and external challenges in charting future policy. OVERSEAS AND REGIONAL ECONOMIC TRENDS - CRUDE OIL PRICES Crude oil futures in New York hit a high of $67.10 a barrel. barrel on August 12, 2005. It hit a new record high of $70.80 per barrel. in subsequent trading and ahead of damage reports and expected disruption of US oil production in the wake of Hurricane Katrina, which made landfall on the US Gulf Coast.
Therefore, the Malaysian government has warned of the likelihood of another increase in fuel prices if crude oil prices continue to rise. However, the government has stepped in to mediate the said factors in September by announcing several measures to mitigate the inflationary impact on the public, namely reducing road tax for both business and private vehicle owners according to different levels of engine capacity (approx. vehicle owners in the country will benefit from the toll deduction); the government also assured that the prices of gasoline, diesel, cooking oil will not be raised in 2005 and corresponding tolls until 2007. Concerns centered on whether record high fuel prices in the United States would hold back consumer spending, a primary driver of economic growth.
On June 10, 2005, the Federal Reserve Chairman informed the US Congress that interest rates will be revised upwards, but at a measured pace given the solid footing of the US economy and the contained inflation.
C&M REVENUE UPDATE
Media Prima revenue grew by 24% to RM172mil. from the same period in 2004 due to strong growth in advertising revenue. ASTRO's revenue grew by 21% to RM0.96 billion (1H-04:RM0.792 billion) due to the strong growth in advertising revenue from its multi-channel TV and radio segments, as well as higher subscription revenue from the multi-channel TV segment. Nationwide revenue fell marginally by 3% or RM1 million. to RM35 million. for the first half of 2005.
GD Express shares debuted on the MESDAQ market on May 17, 2005; the express carrier recorded a revenue of RM16 million in the first half. The listed post and courier sub-sector accounts for about 3% or RM445 million of the total revenue of the listed C&M sector. The second category of players, or more aptly called "emerging telecommunications players", comprises VoIP (Voice over Internet Protocol) communication service providers, broadband Internet, discounted call services, comprehensive integrated IT services and solution providers.
This sub-sector accounts for about 2% of the total C&M revenue of RM325 million for the first half of 2005. On an annual basis, the C&M industry revenue for the full year 2005 is expected to be in the vicinity of RM26.6 billion, exceeding the RM24.5 billion achieved in 2004 for the listed C&M companies.
MESDAQ MARKET
The top 15 component stocks of the MESDAQ Composite Index (MCI) ranked by market capitalization in the first half of 2005 include three MCMC licensees.
FEATURE – FACILITATION OF ACCESS
The combined income of the active companies for the 2003 financial year amounted to approximately RM11 million, with earnings before interest and tax (EBIT) of RM0.7 million. However, such financial profile in most cases does not yet reflect the revenue sources of the recently activated licensable activity, which includes the construction of towers and base station transmitters. However, as the direct beneficiaries of the government's facilitation of access to the local loop, it is expected that these actors will then be in a position to expand their service portfolio offerings to their customers and an opportunity to grow their businesses over time. to grow.
A rapid expansion of broadband access and other related services is also expected to follow, according to a recent review of the Access List. At the end of June 2005, about half of the last kilometers are engaged in providing broadband Internet access. Facilitating access through a local loop decoupling approach1 not only reduces technical barriers to competitive entry, but also reduces burdensome levels of capital investment for new entrants by focusing capital requirements on only part of the network.
It is also a regulatory tool for increasing competition in the short term, which, among other things, can bring about a desired positive impact on consumer choice and service quality. Split local loop access can be treated in terms of varying degrees of local loop access, that is, full access service, sub-circuit service, line-split service, and bitstream service. The Access List is one of the regulatory instruments of the country's multimedia access and communication regime.
Bitstream service unbundling essentially enables the provision of broadband access services that can be used to provide a range of own-brand broadband services, including Internet access and other related services. At the same time, the incumbent may still provide PSTN services to the access seeker's customers. Local loop unbundling usually requires incumbent operators to provide access to their local loops to competitors.
FEATURE – MCMC AND DIGITAL SIGNATURES
The function of a licensed Certification Authority (CA) is to issue a digital certificate to a subscriber upon application. The respective CAs are therefore only allowed to issue a digital certificate to a subscriber if the requirements of the subscriber to be listed in the certificate are met, including the payment of prescribed fees and charges. As of the end of the second quarter of 2005, the number of digital certificates issued overall had increased by 17.3% from the end of 2004.
The number of digital signature certificates issued to corporations, individuals and government increased by 14.4% respectively. This growth is due to the rapid advancement of technology in cyberspace and the growing awareness of security in e-businesses. Digicert and MSC Trustgate's revenue is derived from issuing digital certificates.
The significant growth recorded shows that Malaysia is more intensively involved in online transactions and more so with the development of leading MSC applications. Regarding the type of digital certificates issued, it can be seen that Digicert is inclined towards government users, while MSC Trustgate is more oriented towards corporate users. The key attributes of digital signature technology are that it provides security and verification of an electronic transaction.
MALAYSIAN ADEX
The communications sector takes the single largest share of the adex market at 16% at RM350.1 million, followed by toiletries and retail sectors at 9% of the market share at RM198.2 million and RM188.1 million respectively. The automotive and finance sectors each take up 5% of the total adex market share, but in a way at RM112.7 million and RM102.2 million respectively. It is interesting to note that print remains the preferred medium for advertising; up to and including the first half of this year recorded RM584.9 million, closely followed by television advertising at RM448.1 million.
It is also interesting to note that the retail sector spent more on television advertising (RM136.2 million) than the communications sector (RM84.1 million). However, compared to the print market share in the same period in 2004, there was a slight decline from 3% to 63%, as the TV market share continues to rise, taking the bulk of the total market share at 32% or RM742. 8 million. However, Media Prima's other free-to-air channel, 8TV, saw an incredible 65.5% growth from RM53 million to RM87.7 million.
Both NTV7 and TV1 had positive growth during this period; 4% for NTV7 to RM175.1 million respectively and a staggering 94.9% growth for TV1 to RM19.1 million respectively. One of AMP's Bahasa Malaysia radio stations, Era FM, continues its reign as the top medium for radio advertising, registering a slight growth of 8.7% to RM19.9 million. Their Chinese language station, My FM, continued to be the second most preferred radio station for advertising at RM13.9 million.
Sinar FM recorded a whopping 140% from just RM0.5 million in advertising revenue for the first half of 2004 compared to RM1.2 million for the same period this year. Specifically, the advertising sector in the communications sector continues its upward trend, registering as much as RM350 million at the end of June 2005, double the first quarter adex of RM176.2 million. From the RM350 million recorded for advertising in the communications sector, the bulk of advertising, at 42%, goes to ads for mobile services at RM146.2 million. RM; followed by mobile interactive services ads which amounted to RM116.5 million or 33%.
Celcom's parent company Telekom Malaysia Berhad spent just RM1.6 million on advertising, while Time spent RM4.1 million. Of the total of RM130.1 million for mobile interactive services, Celcom's advertising totaled RM6.6 million, while DiGi totaled RM5.1 million.
GLOSSARY
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